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All-in January

Overview of the top regulatory developments in January.

AUSTRALIA

Following the success of the casino-style social game, Slotomania, several critics, led by Senator Nick Xenophon, made a call for legislative changes to prevent what they see as early exposure/grooming of children to gambling. A Private Members Bill is expected to be introduced in February which intends to close what Xenophon considers to be a legal loophole which excludes virtual gaming apps and the use of virtual currency from Australia’s Interactive Gambling Act 2001. The precise content of the Bill is currently unknown and it will be interesting to see what developments, if any, will be made to Australia’s gaming legislation.

More on this story can be found at Australia: is the number up for virtual currency gaming apps

AUSTRIA

The tender process for the award of Austria’s sole remote gaming licence was amended to fall in line with the principles of transparency and non-discrimination under European law. However, due to the fact that the state-owned monopoly, Osterreichische Lotterien GmbH, managed to secure the licence for a further 15 year term, a number of challenges were made by failed bidders to the tender process, claiming that the procedure was customised for Osterreichische Lotterien GmbH. The challenges were heard before the Austrian Constitutional Court which ruled that the monopoly licence was awarded legally by the Finance Ministry.

A full report can be found at Austria: court rules lottery tender to be constitutional.

GERMANY

The uncertainty with the German regulatory position has been an issue for some time, and will remain as long as the Interstate Treaty’s compliance with European law is in doubt. Much of the uncertainty stems from the Federal State of Schleswig Holstein which elected to pass its own Gambling Act on 1 January 2012. The Gambling Act was subsequently revoked on 24 January 2013, but prior to revocation the Schleswig Holstein authorities granted 26 licences for sports betting operators and 20 for online casino game operators. These licences will remain in effect for six years, notwithstanding the revocation of the Gambling Act.

Also on 24 January 2013, Germany’s Federal Court of Justice decided to stay proceedings in a case involving a state lottery and an independent operator. In light of the inconsistency with Germany having licences issued at a state level (in Schleswig-Holstein) and having a separate Interstate Treaty (supported by the other 15 German states) which provides a different framework, the Federal Court of Justice has referred four questions to the European Court of Justice for a preliminary ruling.

Please see the following links for additional commentary:

Schleswig Holstein repeals Gambling Act

Federal Court of Justice submits questions to ECJ

GREECE

By way of background, in 2012 Greece finally decided to liberalise its online gaming regime which permitted operators located within the EEA to obtain a local licence. A transitional period commenced whereby operators who were legally licensed in an EEA Members State were able to continue to provide services into Greece until the implementation of the law, but only by committing themselves immediately and voluntarily to a burdensome tax regime.

The framework received negative comments from the Advocate General in October 2012 and on 24 January 2013 (in the joined Greek cases C-186/11 and C-209/11 to which Sportingbet, William Hill and Stanleybet were all party) it was held that the national legislation which continues to preserve exclusive rights for the monopoly, OPAP, was incompatible with EU law. The matter now rests with the Greek Council of State, but it is clear that any licensing regime which does not address the monopoly’s position or fails to uphold the principles of equal treatment and non discrimination on grounds of nationality, may be vulnerable to challenge.

HUNGARY

Draft legislation has been notified to the European Commission which proposes to grant licences to state owned companies or local concessions only, notwithstanding opinions from the ECJ that Hungary needs to liberalise its gambling laws. The current regime allows private operators to obtain licences for horse race betting and casino card games. However, the executive order that implements the current licensing regime is yet to be introduced and no licences have thus far been granted. The latest proposed amendments obviously reverse this position and present the European Commission with further impetus to challenge the regime.

Further details of the proposed changes can be found at Hungary: proposed gambling law modifications

SWEDEN

A landmark decision by the Swedish Supreme Court found that the Lotteries Act has stricter criminal sanctions for the promotion of foreign lotteries than its national lottery counter-part, which is incompatible with the TFEU on grounds of discrimination. In respect of civil sanctions, the Director General for the Swedish Gaming Board commented that issuing injunctions to media companies for promoting gambling is an inadequate enforcement tool as a result of the protection granted to the media by the Fundamental Law on the Freedom of Expression and the Freedom of the Press Act. Therefore, it is unlikely that local media companies will be punished for advertising the services of offshore operators, despite the law rendering it illegal. As a result, we may see an amendment to the Lotteries Act in the near future.

UK

On 15 January the UK Government published its responses to the Culture, Media and Sports Select Committee’s Report (published in July 2012), which examined the operation of the Gambling Act 2005. The responses touched on a number of areas including the proliferation of gaming machines, problem gambling, the development of casinos and the proposals to regulate online gambling on a point of consumption basis. The Government is rightly reluctant to make any definitive statements surrounding the Select Committee’s recommendations without sufficient supporting evidence.

A full review of the Government’s responses can be accessed at UK: Government responds to the DCMS Select Committee Report.

And finally…

PHILIPPINES

Rizal Day (30 December), a non-working holiday in the Philippines, gained a new significance this year when a 1948 law was discovered that also prohibits gambling on this day. Republic Act 229 expressly prohibits cockfighting, horseracing and jai alai on Rizal Day, with penalties applicable for any breach.